Still Chop, Chop, Choppin’ At The Fed’s Front Door

Today’s SP close at exactly 2100 marked the culmination of a whole lot of choppin’. In fact, about six months worth, given that the big cap index first crossed the 2100 mark back in early February.

^SPX data by YCharts

But do not be troubled, we are told by Wall Street. What the above chart signifies is a healthy market correction. That’s right—–a correction in time, not price!

The healthy part, according to the sell-side pitchmen, is owing to the fact that market’s can’t go down unless there is a recession, but none is remotely in sight. So relax, count your winnings and get refreshed for the next push higher.

But here’s the thing. We are now in month 74 of the current so-called recovery, and by the standards of post-war business expansions this one is getting long in the tooth.

In that regard, the abundant evidence from the “incoming” data that this cycle is nearing its exhaustion point is outlined below. But the contextual point is that none of the three slightly longer expansions shown in the graph are remotely relevant to our current circumstances; they provide no comfort whatsoever that a visitation by the grim ripper of recession has been given an indefinite stay.

Historical Length of Recoveries

The 105 month expansion of the 1960s, for example, is a testament to LBJ’s guns and butter economics which eventually pushed the US economy into a red hot boil owing to the massive industrial mobilization for the Vietnam War and space program. When the Kennedy-Johnson expansion finally ended in 1968 it took nearly three years of sub-par economic growth to stabilize the macro-economy and purge the inflationary fevers that had been unleashed.

It is also a reminder that clean balance sheets are a sitting duck for statist monetary and fiscal stimulus measures that essentially steal from the future in order to

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